Microsoft Pays $25 Million To End US Probe Into Bribery Overseas (bloomberg.com) 52
An anonymous reader quotes a report from Bloomberg: Microsoft Corp. agreed to pay $25 million to settle U.S. government investigations into alleged bribery by former employees in Hungary. The software maker's Hungarian subsidiary entered into a non-prosecution agreement with the U.S. Department of Justice and a cease-and-desist order with the Securities and Exchange Commission, Microsoft said in an email to employees from Chief Legal Officer Brad Smith that was posted Monday on the company's web site. The case concerned violations of the Foreign Corrupt Practices Act, according to an SEC filing.
The Justice Department concluded that between 2013 and June 2015 "a senior executive and some other employees at Microsoft Hungary participated in a scheme to inflate margins in the Microsoft sales channel, which were used to fund improper payments under the FCPA," Smith wrote in the email. Microsoft sold software to partners at a discount and the partners then resold the products to the Hungarian government at a higher price. The difference went to fund kickbacks to government officials, the Wall Street Journal reported in 2018. The company fired the employees involved, Smith noted. The company says it "now requires discounts it provides to sales partners to be passed directly to government customers," and "the company makes customers aware of any discounts to ensure they are receiving them and that funds are not diverted for other purposes like bribes," the report adds. "The company also is using machine-learning software to track contracts and flag discounts or other practices that appear unusual."
In semi-related news, Microsoft today announced that it would invest $1 billion in OpenAI to develop AI technologies on Azure.
The Justice Department concluded that between 2013 and June 2015 "a senior executive and some other employees at Microsoft Hungary participated in a scheme to inflate margins in the Microsoft sales channel, which were used to fund improper payments under the FCPA," Smith wrote in the email. Microsoft sold software to partners at a discount and the partners then resold the products to the Hungarian government at a higher price. The difference went to fund kickbacks to government officials, the Wall Street Journal reported in 2018. The company fired the employees involved, Smith noted. The company says it "now requires discounts it provides to sales partners to be passed directly to government customers," and "the company makes customers aware of any discounts to ensure they are receiving them and that funds are not diverted for other purposes like bribes," the report adds. "The company also is using machine-learning software to track contracts and flag discounts or other practices that appear unusual."
In semi-related news, Microsoft today announced that it would invest $1 billion in OpenAI to develop AI technologies on Azure.
What about? (Score:2)
Makes sense (Score:1)
EU: "You're accused of giving us money."
Microsoft: "Guilty as charged. Here's some money."
MS pays $25M bribe to end bribe investigation (Score:1)
per subject
Bribed turtles* all the way down (Score:2)
They are probably bribing the gov't via campaign donations to stop investigations into bribery.
* Not intended as a Mitch McConnell joke.
So they paid money (Score:5, Insightful)
Re: (Score:2)
Pretty interesting analogy.
This is one reason why governments that charge fines for breaking the law are more focused on laws that generate revenue instead of laws facilitating justice. If a business breaks the law, it needs to be penalized in some other fashion. If a fine is assessed then that fine needs to 100% go towards the customers they screwed or the citizens that were affected by the laws they violated. As long as Government sees a penny then government will only be in a position that is a confli
Re: (Score:3)
The article only tells half of the story, ie microsoft employees giving bribes which is illegal under US jurisdiction. Hungarian government officials receiving "kickbacks" aka bribes is a case for the Hungarian judicial system and not covered by the story.
Are you suggesting that the Hungarian government should receive the settlement money from the US case based on the overprice they payed?
What about the Hungarian case of taking bribes, how should that be handled wrt monetary damages?
Re: (Score:2)
I am guessing you don't understand what the word "If" means. Here is a handy link to the definition in case you need a little assistance.
https://www.merriam-webster.co... [merriam-webster.com]
The Conclusion you leapt to for no reason shows you are grasping for straws to build a strawman argument. The Hungarian Judicial system has jack shit to do with anything I said.
Re: (Score:2)
No need to be impolite, I'm not making any argument and I know the meaning of if.
What I am asking you is for a clarification. We can Ignore that the Hungarian government suffered a loss and their jurisdiction, it could just as well be a another company in the US.
Your proposition as I understand it is that the government should not take money for themselves if someone committed the crime giving bribes, but that the victim should be fully compensated. My question is thus, what should the receiver of the bribe
Re: (Score:1)
You will be shocked to know that US companies get around that by hiring consultants for huge salaries knowing full well that consultants will use that money to bribe while pocketing the leftover money. Key is for the US companies to not ask too many questions about what those consultants actually do. Hey they get results. That way US company executives can testify in US court of law that they never bribed anyone and doesn't know about any bribes with a straight face.
Re: (Score:2)
My first thought too.
Re: (Score:2)
But not foreign people. It's perfectly OK to slip American politicians a few bucks. That's First Amendment protected speech. The FCPA does it's job rather well: It keeps companies' bribery expenditures here at home.
Hungary is not unique (Score:2)
Political corruption always exists. In the best systems of government, it is kept to a bare minimum, and hopefully falls below the threshold of interfering too much in the markets and peoples private lives.
These corporations get caught, every once in a while, greasing the wheels of commerce... yet the graft continues. It makes sense that we probably only hear about a tiny percentage of the institutional bribery.
FCPA fines for foreign companies (Score:3)
Interpretation... (Score:4, Interesting)
"Microsoft Corp. agreed to pay $25 million to settle U.S. government investigations into alleged bribery by former employees in Hungary. The software maker's Hungarian subsidiary entered into a non-prosecution agreement with the U.S. Department of Justice and a cease-and-desist order with the Securities and Exchange Commission"
In other words, a bribe to make the allegations of briber go away. Got it.
So, MS has bribed the US government instead (Score:2)
Machine Learning? (Score:2)
I'm always skeptical about mentions of machine learning. Especially times like now when their backs are slightly to the wall and they want to save face - "Look how serious we are, we are using machine learning!".
I feel like half the time people say they are using AI or machine-learning, they are really just using a bunch of nested IF statements. You would probably have half